Why Only 2% of Lean Transformations Achieve the Anticipated Results

by Mascha Westen-Reinders Folmer, Reinders Folmer Consultancy, 12 February, 2021

A large survey conducted by Industry Week in 2007 found that only 2% of companies that have a Lean programme achieved their anticipated results. Other articles claim that 70-80% of all company-wide comprehensive change programmes fail.

Even if these numbers may not be empirically proven, they do point out the low success rate of Lean transformations outside Toyota. In my research on this topic, I found that one of the main reasons is, that organisations implementing Lean focus mainly on process optimisation for more customer value and the Lean tools you can use. Whereas Toyota has an equal amount of focus on respect for and well-being of employees and they have company values and goals that reflect this.

So what are the key ingredients you need to have in place to make your Lean transformation successful? My take out from the articles I have read, are the following 5 topics:

1. Vision, mission & value statement

Most organisations have vision and mission statements, but do they include:

• what the company will look like after the Lean transformation in terms of processes, culture and behaviour? This gives the employees a sense of direction and it helps to focus their efforts.
• a plan on how to get there? What methods and tools, what focus, sequence and planning (long term). This way employees have an understanding of what to expect when.
• a value statement? So employees know what the organisation stands for. People usually make decisions based on their own values and gut feelings, so a value statement is the fundament, if you want them to make decisions in line with the organisation’s goals.

2. Cultural framework

A Lean cultural framework sets the boundaries for a positive culture by:

• Establishing guiding principles or objective behavioural expectations for the entire organisation.
• Linking human resources policies and procedures to the behavioural expectations and the Lean vision and implementation.
• Establishing organisational leadership and management principles.
• Linking personal goals to your organisation’s goals.
• Determining the required skills and mindset.

3. Leadership commitment and development

Board members, senior and middle management need to commit to the Lean transformation, no excuses, no escape. So developing your management to become Lean leaders who support and mentor their employees is crucial. They need to learn and apply the new way of thinking and acting required by everyone in the company.

4. Focus on continuous improvement

Taking small incremental improvement steps as a new standard helps to:

• Sustain long term improvement and establish a learning organisation
• Increase employee involvement and retainment

And all of this while improving your products and processes and increasing your customer satisfaction.

5. Discipline

The only way to reach a change in thinking and acting is to apply the principles in a very disciplined and repetitive way. Just like you raise your kids or train your dog.

Toyota implemented a kata structure to achieve this. In this structure you determine target conditions for all Lean principles and all leaders ask standard questions defined in corresponding improvement kata’s. That means coaching people in putting an improvement kata into practice every day.

Conclusion:

Key to a successful Lean transformation is to put an equal amount of focus on giving direction and focus on values, improvement and behaviour, instead of only on process optimisation and applying a set of techniques for eliminating waste. Other than doing a set of projects, Lean transformation is a process by which managers become leaders, who develop their employees so that desired results can be achieved, again and again.

Do you want your Lean Transformation to succeed? Feel free to contact me for a quick scan